Bank of England upgrades UK growth forecast

03 May 2019

The Bank of England has upgraded its 2019 growth forecast for the UK economy.

It now predicts that the UK economy will grow by 1.5% in 2019, 1.6% in 2020 and 2.1% in 2021.

Additionally, the Monetary Policy Committee (MPC) voted to keep interest rates on hold at 0.75% at its recent meeting. The rates have been at this level since August, when they were raised by a quarter of a percentage point.

Meanwhile, the Bank of England expects the unemployment rate to continue to fall over the coming years, reaching 3.5% by 2022 – representing its lowest level since 1973.

'Both the pound and UK interest rates are still stuck in a tug of war between a strong employment market and wage growth, which ordinarily would pull them higher, and a soft housing market, weak exports and falling consumer confidence, which are pulling in the opposite direction,' said Erik Norland, Senior Economist at CME Group.

'If Parliament seals the deal to leave the EU, it will likely send the pound significantly higher and nudge interest rate expectations in the direction of further rate hikes later this year.'

Stringer Mallard, Harrogate Accountants

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